Every industry is exploring ways to use data to make better business decisions. The commercial real estate sector is no exception. Unfortunately, this has sometimes been met with frustration. Since the promise of “big data,” technology designed for commercial buildings has not always succeeded in making data relevant and, more importantly, actionable. Without this actionable insight from your building, the data created from the buildings cannot significantly increase the net operating income (NOI).
A building’s operating profit can be increased in two important ways, by reducing operating costs and increasing revenue. Basically, buildings need to be managed better. There are many tools that can help improve the daily operations of a building, but what is often missing is the essential aspect of using data to improve the building by better understanding what changes can reduce costs. and increase income.
Centralize and automate
In an attempt to do more with their building data, nearly half of commercial real estate teams say they will increase their spending on CRE technology this year, according to research from Building Engines. And commercial property management software for construction operations is among the top areas of investment.
The right platform will create the flexibility to choose the solutions that align with your property’s highest priorities. For many buildings, this means increasing the NOI. The right technology tool can allow a building to connect its building management platforms to existing accounting systems to synchronize all financial documents. Once done, the data can then help managers do things like automatically flag all billable charges, quickly generate invoices for tenants, and process payments in one place.
Automating accounting processes requires a few important sets first. Best practice is to review the list of tenants first, as the wording of the lease may be different depending on what the broker has negotiated. Next, managers should ensure that all data is captured on a tenant-by-tenant basis to ensure costs are properly segregated. Real estate teams then need to be educated on how to manage their cost base and what they are allowed to do with markups. Finally, workflow processes and notifications can be configured to ensure real estate teams capture every billable item to track during the maintenance of their building and tenants.
To fully maximize construction, NOI data must first be centralized. From there, a number of them can lead to capturing thousands (and in some cases hundreds of thousands) of dollars per year in service revenue, while ensuring that every dollar is captured in the right place. rate and with the right margin according to the leases.
Even something as simple as heating or cooling a building can be difficult to optimize. Maintaining a building at a comfortable temperature and humidity requires juggling an incredible number of variables such as outdoor temperatures, relative humidity levels, building occupancy, sun exposure, energy prices depending on the time of use and ventilation.
A smart HVAC optimization system integrates with existing building management systems to automatically optimize HVAC systems in any building. Such tools can help reduce energy consumption and costs quickly. These tools are also cost effective as no additional investment is required. An intelligent HVAC optimization system will monitor all HVAC equipment 24/7 to learn equipment operations and leverage artificial intelligence and data inputs to make real-time micro-adjustments to to optimize each element of the HVAC equipment.
Technology can improve operational efficiency, help your portfolio meet its sustainability goals, and increase return on investment. For example, one building underwent upgrades to its HVAC, including a secondary pumping system that allowed its managers to control airflow, but they noticed a slight reduction in consumption. Eventually, they let a machine learning algorithm have a try. The software bypassed all other operating systems to get a complete and clearer view of all equipment and was able to detect that a three-way cooler valve was locked open, and many system fans secondary were pumping to areas that weren’t working. need additional heating or cooling.
Eventually, the smart software was able to recalibrate all the vents to respond to local temperature changes and began running predictions of different scenarios to inform building staff. With mechanical upgrades, software [FA1] saved the building 55% on HVAC energy costs with a 60% reduction in deviation from temperature setpoints. As the software learns, it will improve further to fine-tune the operation of each piece of HVAC equipment in the entire system.
WEBINAR | October 18 1 p.m. ET
Use building data to make decisions that generate NOI
Join real estate technology experts from Building Engines, Propmodo, and Empire State Realty Trust to discover how software can improve nearly every function of a building, making it more efficient, useful, and profitable.
Leveraging Tenant Experience Data
Many commercial landlords use annual surveys to gauge what tenants think of their buildings. But a once-a-year survey won’t help you gather the critical information you need to course-correct in a timely manner. That’s why smart operators supplement annual surveys with ongoing polls and polls to compare tenant sentiment to tenant space and real-time amenity usage.
This means accessing real-time data on tenant preferences and behaviors. And you can pull that data directly from the technology tools you’re running, like a tenant experience app. When leveraged correctly, the data can directly increase the NOI. For example, visitor data can help you understand how the number of visitors to each tenant changes daily.
Space usage data can help you determine which spaces are or are not being used. You can use this information to focus investments on popular spaces that can lead to higher tenant satisfaction and retention and, therefore, a healthier return on investment. By gathering information on these data points and more, real estate teams can get a complete picture of the tenant experience in their portfolios.
Increase, not replace
These are just]a few examples of how data can help make buildings more profitable. Buildings contain so much data that can be directly linked to results such as NOI growth. By connecting building systems, data can be used for the continuous improvement of almost any process or at least any measurable process. But the amount of data needed and the analysis process can often be too much for even a large building management team.
Machines are capable of calculating more complicated equations than a human could ever hope to solve. However, this does not mean that machine learning algorithms will replace humans when it comes to building systems. At least for the foreseeable future, an experienced human operator will need to oversee the system and implement changes suggested by the software. Rather than seeing machines as a viable alternative to property management, they should be seen as part of the toolkit.